Amendment of the Law

Debate between Graeme Morrice and Stephen Lloyd

Monday 26th March 2012 Commons Chamber

[Graeme Morrice (Livingston) (Lab)]

I thank you, Mr Deputy Speaker, and my hon. Friend the Member for East Lothian (Fiona O’Donnell).

Over the past few days, I have been speaking to people in my constituency about the Budget, gauging their opinion and gathering their views. Everybody I spoke to was clear that, once again, the Tories have shown their true colours with a classic Tory Budget under which millions will pay more so that millionaires can pay less. That is evidenced by the facts, as we have heard throughout this debate, with 14,000 millionaires receiving a tax cut worth more than £40,000 a year, while 4.4 million pensioners lose an average of £83 a year.

It is a classic Tory Budget, but with a difference—it was possible only thanks to the support of the Liberal Democrats. Those same Lib Dems publicly opposed any change to the 50p rate of income tax until just a few weeks ago; those same Lib Dems, before the last general election, repeatedly stated their opposition to immediate public spending cuts, only to support a Budget reduction of more than £6 billion within two weeks of forming the coalition; and, lest we forget, those same Lib Dems promised not to raise VAT and then raised it. The Opposition will not forget the sycophantic sight of Lib Dem Members waving their Order Papers in glee last Wednesday at a George Osborne Budget—yes, a George Osborne Budget. I am sure the country will not forget that sickening display at the local elections in six weeks’ time. We can safely say that any lingering uncertainties about the Liberal Democrats’ wholesale abandonment of their progressive roots have finally been laid to rest by this Budget. British Liberal Democracy RIP.

[Stephen Lloyd (Eastbourne) (LD)]

Does the hon. Gentleman agree that the Liberal Democrat policy of increasing the personal tax allowance to £10,000 by 2015, which was in our manifesto, is not only being delivered but being delivered quicker than that? It will take 2 million of the poorest people out of paying tax altogether.

[Graeme Morrice]

I have been told that I am not getting an extra minute, so I will just press on with my speech.

I want to say a few words about the 50p tax rate and about the granny tax, which has angered many people in my constituency, before finishing with the Government’s failure on jobs and growth.

The 50p rate raised about £1 billion in its first year, and its continuation could have been used to cut fuel duty, about which many of my constituents have written to me, to reverse the Government’s damaging cuts to tax credits or to help reduce the deficit. Instead, the Chancellor has chosen to give the richest 1% of earners a huge payout. People on middle and low incomes are already being squeezed by rising fuel, energy and food prices, and now their tax credits and child benefit are being cut. Yet again, the Government have made the wrong choice and proved how totally out of touch they are.

Amendment of the Law

Debate between Graeme Morrice and Stephen Lloyd

Tuesday 29th March 2011 Commons Chamber

[Graeme Morrice (Livingston) (Lab)]

Thank you for calling me to speak, Madam Deputy Speaker—although I am from Scotland, I can get your title right.

The Budget has been billed as the Budget for growth and jobs, yet many right hon. and hon. Labour Members have already demonstrated ably why it has failed to live up to its billing on growth. It is also crystal clear that it is not a Budget for jobs either. Unemployment continues to rise, reaching a higher level than at any point under the previous Labour Government, yet the Chancellor’s Budget did next to nothing to address that serious issue.

The Government, like all previous Tory Administrations, basically believe that rising unemployment is a price worth paying. When they say that we are all in it together, we know that what they really mean is that the vulnerable, the unemployed and the poor are all in it together as they will bear the brunt of the Government’s reckless policies.

Labour’s priority in responding to the recession was to keep people in work. The previous Labour Government were determined to prevent the same devastation to families and communities that the Tories presided over in the 1980s and early 1990s, when unemployment rose to more than 3 million. Labour’s strategy was working and unemployment was falling, but now, less than a year into the life of this Government, unemployment is rising again, reaching its highest level for 17 years. That should have put jobs at the forefront of the Chancellor’s plans last week, but the evidence from his statement proves otherwise.

The £20 million funding allocated next year to support initiatives aimed at creating jobs is a pitiful amount in the grand scheme of things and the centrepiece of the Government’s plans for promoting the creation of new jobs, the establishment of 21 enterprise zones in England—not applicable in Scotland—simply takes us back to the failed past of the Thatcher and Major years. Indeed, entrepreneur William Chase, founder of the Chase distillery and Tyrrells crisps, described the plan for enterprise zones as a “criminal waste of cash”. He said:

“The Thatcher government wasted huge amounts of cash on enterprise zones in the eighties. They didn’t work then and I don’t see any reason why they should work now.”

According to a recent Centre for Cities report, which my hon. Friend the Member for Rochdale (Simon Danczuk) mentioned earlier, the cost to the public purse of each additional job created in an enterprise zone during the 10 years of the programme was estimated at £17,000 at 1994-95 prices or £26,000 at 2010-11 prices, yet Labour’s future jobs fund cost only £6,500 per job created and the new deal for young people just £3,500 per job.

[Stephen Lloyd]

Is the hon. Gentleman aware that recent research showed that 50% of people who had been placed through the future jobs fund were unfortunately back on benefits seven months afterwards? Does he agree that that shows that it might not have been money well spent?

[Graeme Morrice]

And 50% of those people continued in full-time employment.

The Centre for Cities report also said that most jobs had simply been displaced from elsewhere and so they may bring short-lived prosperity to one area at the expense of another. That point was ably made earlier by my hon. Friends the Members for Wolverhampton North East (Emma Reynolds), for Kilmarnock and Loudoun (Cathy Jamieson) and for Newcastle upon Tyne North (Catherine McKinnell). Given the Government’s professed enthusiasm for efficiency it seems bizarre that they should pursue such an inefficient means of creating new jobs, but when it comes to unemployment the Tories continue to be stuck in a time warp. They believe that the Thatcherite policies of the 1980s are the solution to today’s job crisis, but we know they are no more the solution now than they were then, when millions were left on the unemployment scrap heap.

The most alarming aspect of unemployment today is the UK’s high level of youth unemployment. As Members will know, the number of unemployed 16 to 24-year-olds increased by 30,000 in the last quarter to reach nearly a million—some 20% of all young people—which is the highest figure since comparable records began in 1992. The Government have been pretending that this is somehow not their problem and that they are not responsible for that record high, but let us look at what they have done since taking office last year. They have axed Labour’s future jobs fund—a criminally short-sighted decision—they have axed the education maintenance allowance, thereby disincentivising young people to stay in further education and improve their skills, and they have axed other employment schemes that were aimed at supporting into the workplace young people who have been out of work for more than six months. Let there be no doubt that this Tory Government and their Lib-Dem pals are the ones who are responsible for the record levels of our young people out of work.

Youth unemployment in my constituency stands at nearly 1,000, which is certainly not the worst figure in the country by any means, but every unemployed young person is one too many. I know from speaking to young people in my area that many feel a sense of hopelessness about their situation. They feel that little is being done to support them, that no one in Government cares about their plight and that their future is bleak. Once again, a whole generation of young people is being cut adrift by the dogmatic policies of the Members on the Government Benches.

The Government’s work experience placements will not improve young people’s employment prospects in the same way that six months of real work would. The Department for Work and Pensions has already said that

“the target group for work experience will be a very small proportion of young claimants aged 18-21”

and that it is not about guaranteeing young people a permanent job. The extra 12,500 apprenticeships a year announced in the Budget are woefully inadequate given that nearly a million young people are out of work and need help.

The Federation of Small Businesses has said that the Chancellor’s Budget did not go far enough to incentivise job creation, so action on job creation is another clear dividing line between the Government and the Opposition. The Government stick with their reckless cuts and do nothing to address the record level of unemployment, particularly youth unemployment, that they are presiding over.